P.Thirumalai Murugan vs. The Commissioner

Facts

The petitioner, a shopkeeper in a Corporation bus stand, challenged a demand notice dated July 15, 2025, issued by the Assistant Commissioner. The petitioner sought to quash this notice and have his rent refixed at Rs. 140/- per sq. ft. per month, as directed by the Supreme Court in SLP(C) No. 27248-27249 of 2023. He also sought adjustment of excess rent collected from January 2022 to May 2025 towards future rent. The petitioner's lease was renewed in 2016, with rent subject to 15% enhancement every nine years. Following construction of new shops, the Corporation initially demanded Rs. 225/- per sq. ft. and an additional security deposit, which the petitioner opposed. After a series of legal challenges, the Supreme Court directed rent to be fixed at Rs. 140/- per sq. ft. subject to the petitioner furnishing an undertaking. Despite this, the petitioner claims the respondents continued to collect Rs. 225/- per sq. ft. and issued the impugned demand notice.

Held

The Court held that the demand notice dated July 15, 2025, issued by the second respondent was in direct contravention of the Supreme Court's order dated December 13, 2023, in SLP (C) Nos. 27248–27249 of 2023. The Supreme Court had fixed the rent at Rs. 140/- per sq. ft. based on the Corporation's own submission that they could not secure tenants at the demanded rate of Rs. 225/- per sq. ft. and had reduced the lease rental. Therefore, any demand exceeding this rate, including the enhanced rate mentioned in the notice, was illegal. The Court also found merit in the petitioner's claim for adjustment of excess rent collected. The reasoning was that the Supreme Court's order was binding and had to be implemented by the respondents. The ratio decidendi is that statutory authorities are bound by the orders of superior courts, and any action taken in defiance of such orders is liable to be quashed. The Court allowed the writ petition, quashed the impugned demand notice, and directed the respondents to refix the rent at Rs. 140/- per sq. ft. per month. Furthermore, the respondents were directed to adjust the excess rental amounts collected from January 2022 to May 2025 towards the future rent payable by the petitioner. No issue was expressly left undecided.

Key Issues

1. Whether the demand notice dated July 15, 2025, issued by the Assistant Commissioner, is in violation of the Supreme Court's order dated December 13, 2023, in SLP(C) Nos. 27248–27249 of 2023, which fixed the lease rent at Rs. 140/- per sq. ft. per month. Petitioner's argument: The demand notice is contrary to the Supreme Court's order, which was based on the Corporation's own representation of reducing the lease rental. The petitioner has been paying rent as per the Supreme Court's direction, and the demand for a higher rate, including an enhanced rate of Rs. 258.75 per sq. ft., is illegal. Revenue/State's argument: Not recorded in the judgment. 2. Whether the petitioner is entitled to an adjustment of excess rental amounts collected from January 2022 to May 2025 towards future rent. Petitioner's argument: The respondents have been forcibly collecting Rs. 225/- per sq. ft., which is in excess of the Rs. 140/- per sq. ft. rate fixed by the Supreme Court. This excess amount should be adjusted against future rent. Revenue/State's argument: Not recorded in the judgment.